Shein reveals quarterly loss ahead of Hong Kong listing

Singapore-based fast fashion retailer Shein has disclosed a softening in profitability and a deceleration in revenue growth, providing investors with an initial detailed view of its financial health ahead of a planned initial public offering (IPO) in Hong Kong.

According to a regulatory filing submitted to the Hong Kong Stock Exchange under the entity name Shein Global Holdings, the company recorded a net loss of 99 million dollars in the first quarter of 2026. This performance contrasts with a net profit of 395 million dollars achieved during the corresponding period a year earlier. First quarter revenue expanded modestly to 9.05 billion dollars from 8.95 billion dollars in the prior year, reflecting a slower pace of expansion compared to historical rates.

The business disclosed an operating income of 258 million dollars for the first quarter, representing a 26 percent drop year-over-year. For the full year 2025, net profit stood at 2.06 billion dollars, down from 3.37 billion dollars recorded in 2024. Management noted that the first quarter net loss was primarily driven by fair value losses of 328 million dollars on its convertible redeemable preferred shares.

Regulatory shifts and international trade friction weigh on growth

The regulatory filing forms part of the Hong Kong listing process for Shein, which secured listing approval following multi-year delays after previous public listing efforts in New York and London did not proceed. Historically, the retailer provided investors with limited headline guidance regarding sales and profitability. The business is backed by institutional investors including IDG Capital, Mubadala Investment Co., Tiger Global Management, and HSG.

The growth momentum of the retailer has moderated as US trade policy changes and geopolitical disruptions contributed to elevated material expenses, leading to price adjustments for end consumers. Indicators such as global web traffic, mobile application downloads, and US sales volumes have experienced stagnation or decline during the current year.

Shein stated that the removal of the US de minimis tariff exemption on imported parcels valued under 800 dollars adversely impacted its US trade performance and total net revenue growth. However, the business noted that sales trends in the region have since shown signs of normalisation.

European tariff policy and market competition present ongoing risks

The company highlighted additional headwinds stemming from European Union policy shifts, specifically the removal of the 150 euros customs duty exemption. Shein disclosed that the European market accounted for approximately one third of its aggregate revenues in 2025 and during the first quarter of 2026. Management warned that the commercial impact of the EU regulatory change could mirror or exceed the disruption experienced following the US de minimis adjustment.

Alongside trade barriers, Shein continues to navigate competitive pressures from PDD Holdings subsidiary Temu across core European and US markets, while international regulatory authorities maintain heightened scrutiny over its operational practices.

Originally established in mainland China before relocating its corporate headquarters to Singapore, Shein built an international direct-to-consumer (D2C) fast fashion platform by distributing low-priced, trend-driven apparel directly from supplier networks to global retail markets.